Virginia Schedule Cr Instructions

GENERAL INSTRUCTIONS

Each section of Schedule CR notes the carryover period, if
any, that applies to the credit. As a general rule, the maximum
nonrefundable credit available is the amount on Schedule CR,
Section 1, Part 1, Line 1A, reduced by the other credits claimed,
regardless of the order on Schedule CR. There are five
refundable credits: Virginia Coal Employment and Production
Incentive Tax Credit, Coalfield Employment Enhancement Tax
Credit (computed on Form 306), Motion Picture Production
Tax Credit, Agricultural Best Management Practices Tax Credit
and Research and Development Expenses Tax Credit. These
refundable credits are reported in Section 3 of Schedule CR.
The combined total of nonrefundable and refundable credits
is entered on Form 760, Line 27; Form 760PY, Line 27; or
Form 763, Line 27.

If the total of your nonrefundable credits exceeds the balance
of the maximum nonrefundable credit available, the following
rules will ensure that you receive the maximum benefit of your
credits:

First claim any nonrefundable credits without carryforward
provisions (such as the credit for political contributions);

Then, use any current year credits in the order of their
carryover provision;

Finally, report any unused credits as carryovers for
succeeding taxable years to the extent allowed by law.

Partners of a partnership, shareholders of an S corporation,
and members of a limited liability company may claim the
amount of credit passed through to them by the partnership, S
corporation, or limited liability company. Generally, distributions
of a credit by a partnership, S corporation, or limited liability
company to its partners, shareholders, or members are in
proportion to their ownership or interest in the partnership, S
corporation, or limited liability company. Any partnership, S
corporation, or limited liability company distributing a credit
to its partners, shareholders, or members must issue each
owner a Schedule VK-1.

MAXIMUM NONREFUNDABLE CREDITS

The total nonrefundable credits claimed on Schedule CR may
not exceed the amount of tax shown on your return less the
total amount reported for the spouse tax adjustment, credit for
tax paid to another state, and credit for low-income individuals
or Virginia Earned Income Credit.

CREDIT DESCRIPTIONS

Trust Beneficiary Accumulation Distribution Credit

If only claiming the credit set forth under Va. Code § 58.1-370
on Schedule CR, enter the amount of this credit on Form 760,
Line 23; Form 760PY, Line 27; or Form 763, Line 27. Write
"Trust Beneficiary Accumulation
Distribution Credit" to the left
of the entry box. If you are claiming other credits on Schedule
CR, add the amount of this credit to the total on Schedule
CR, Section 2, Line 1A. A schedule showing the credit
computation must be attached to your return.

Enterprise Zone Act Credit

Businesses located within an enterprise zone that have initiated
the use of the Enterprise Zone General Income Tax Credit or
have a signed agreement with the Commonwealth regarding
the use of such credits in place by July 1, 2005, may be eligible,
based on job creation, to claim a credit against the tax due on
zone taxable income in an amount of 80% of the tax due for
the first year and 60% of the tax due for the second through
the tenth years. Excess general tax credit, if any, may not be
carried forward. Such credits are authorized through fiscal
Year 2019.

In addition, businesses located within an enterprise zone that
have initiated the use of the Zone Investment Tax Credit or have
a signed agreement with the Commonwealth regarding the use
of such credits in place by July 1, 2005, may be eligible for a
credit against zone taxable income. The investment credit can
be carried forward until the full amount is used. Such credits
are authorized through fiscal Year 2019.

If the annual tax credit requested exceeds the annual
appropriation, the Virginia Department of Housing and
Community Development will issue a proportionate amount to
each qualified business firm requesting the credits. To claim
this credit, complete Form 301 and attach to Schedule CR.

For qualification forms and additional information, contact:
Virginia Department of Housing and Community
Development, Office of Community Revitalization &
Development, Main Street Centre, 600 East Main Street,
Suite 300, Richmond, VA 23219, or call 804-371-7030.

Neighborhood Assistance Act Tax Credit

The Virginia Neighborhood Assistance Act provides tax
credits to individuals and businesses that make qualified
donations directly to pre-approved Neighborhood Assistance
Program organizations whose primary function is to provide
educational or other qualified services for the benefit of low-
income families. Individuals may receive a credit for a donation
of cash or marketable securities to an eligible organization.
Businesses may receive a credit for a donation of money,
marketable securities, property, limited professional services
or contracting services. Licensed veterinarians, physicians,
dentists, nurses, nurse practitioners, physician assistants,
chiropractors, optometrists, dental hygienists, pharmacists,
professional counselors, clinical social workers, clinical
psychologists, marriage and family therapists, and physical
therapists who donate their services for an approved clinic may
also be eligible for credits. The amount of credit attributable to
a partnership or S corporation must be allocated to the partners
and shareholders in proportion to their ownership or interest in
the partnership or S corporation. Any unused tax credits may
be carried forward for the next five taxable years. For a list of
approved organizations or additional information, contact the
Virginia Department of Social Services, Neighborhood
Assistance Program, 801 E. Main Street, Richmond, VA
23219-3301 or the Virginia Department of Education, P.O.
Box 2120, Richmond, VA 23218-2120, Division of Finance
and Operations, Attn: Neighborhood Assistance Tax Credit
Program for Education.

Recyclable Materials Processing Equipment Credit

For taxable years beginning on or after January 1, 1999, and
before January 1, 2015, an income tax credit may be claimed
for purchases made during the taxable year for machinery
and equipment used exclusively in or on the premises of
manufacturing facilities or plant units which manufacture,
process, compound or produce items of tangible personal
property from recyclable materials within the Commonwealth
for sale. For purposes of determining "purchase price paid,"
the taxpayer may use the original total capitalized cost of such
machinery and equipment, less capitalized interest. The credit
is 10% of such expenditures and cannot exceed 40% of the
taxpayer's Virginia income tax liability for the year, computed
prior to computing the credit. Any amount unused this year may
be carried forward for the next 10 taxable years.

The Virginia Department of Environmental Quality (DEQ)
administers the certification of all recycling machinery and
equipment. To claim this credit, you must have received pre-
approval from DEQ certifying the equipment. Attach your
certified DEQ Form 50-11S along with purchase receipts and
invoices for the equipment purchase to the income tax return
in order to receive the credit. For additional information on
how to qualify for certification, contact the Department of
Environmental Quality, Equipment Certification Officer,
P.O. Box 1105, Richmond, VA 23218 or call 804-698-4145.

Conservation Tillage Equipment Credit

This credit may be claimed by individuals who purchase
conservation tillage equipment for the purpose of agricultural
production. The tax credit is 25% of conservation tillage
equipment expenditures made or $4,000, whichever is less.
The term conservation tillage equipment means no-tillage
planters and drills designed to reduce soil compaction
(including guidance systems to control traffic patterns that are
designed to minimize soil disturbance), which may be attached
to equipment already owned. Any amount unused this year
may be carried over to the next 5 taxable years.

The Precision Fertilizer and Pesticide Application Equipment
Credit is 25% of all expenditures for equipment certified by
the Virginia Soil and Water Conservation Board as providing
more precise pesticide and fertilizer application or $3,750,
whichever is less. Qualifying individuals must be engaged in
agricultural production for market and have in place a nutrient
management plan approved by the local Soil and Water
Conservation District. Any unused tax credits may be carried
forward for the next 5 taxable years.

An income tax credit may be claimed for purchases of vehicle
emissions testing equipment and clean-fuel vehicles made
while you were a Virginia resident.

The Clean-Fuel Vehicle Credit is equal to 10% of the deduction
allowed under Internal Revenue Code (IRC) § 179A for
purchases of clean-fuel vehicles principally garaged in Virginia
or certain refueling property placed in service in Virginia or
10% of the costs used to compute the credit under IRC §
30. The Vehicle Emissions Testing Equipment Credit is 20%
of the purchase or lease price paid during the taxable year
for equipment certified by the Department of Environmental
Quality (DEQ) for vehicle emissions testing within a locality that
is required by law to implement an enhanced vehicle emissions
inspection program or, after January 1, 1998, within any locality
adjacent to those localities required to implement the program.

Clean-Fuel Vehicle Credit - You are not required to submit
a specific form as part of your tax return to document the
purchase of a clean-fuel vehicle. However, you should retain
documentation to support your claim for the tax credit because
an audit may be conducted to verify any credit claimed under
these provisions.

Vehicle Emissions Testing Equipment Credit - Attach a
copy of the program station agreement from Opus Inspection
in which DEQ certifies the equipment as meeting regulation
and specification requirements for use in the enhanced
vehicle emissions inspection program. For a copy of this
program station agreement, contact your Opus Inspection
representative. Please contact the DEQ Northern Virginia
Regional Office in Woodbridge at 703-583-3900 for additional
information. You are not required to submit a specific form for
the Vehicle Emissions Testing Equipment Credit.

Major Business Facility Job Tax Credit

Individuals, estates, trusts, corporations, banks, insurance
companies and telecommunications companies may claim a
Virginia tax credit if the taxpayer creates at least 50 new full-
time jobs in connection with the establishment or expansion
of a major business facility, and the company is engaged in
a qualifying industry in Virginia. If a taxpayer is located in an
enterprise zone or in an economically distressed area (as
defined by the Virginia Economic Development Partnership),
the threshold is reduced from 50 to 25 new full-time jobs.
Credits will be recaptured proportionately if employment
decreases during the five years following the initial credit year.

This nonrefundable credit is equal to $1,000 per qualifying new
job in excess of the 50/25 job threshold in enterprise zones or
economically distressed areas. This credit is spread ratably
over 2 years for taxpayers whose initial credit year begins
January 1, 2009, but before January 1, 2015. The credit only
applies to facilities where an announcement to expand or
establish such a facility was made on or after January 1, 1994.
The credit must be claimed ratably beginning with the taxable
year following the year in which the facility is established or
expanded, or the new qualifying jobs are added. Unused
credits may be carried forward for the next 10 taxable years.
A qualified business firm receiving an Enterprise Zone Job
Creation Grant under Va. Code § 59.1-547 shall not be eligible
to receive a Major Business Facility Job Tax Credit for any job
used to qualify for the Enterprise Zone Job Creation Grant.

To apply for this credit, complete Form 304. All applications must
be submitted to the Department of Taxation, Tax Credit Unit,
P.O. Box 715, Richmond, VA 23218-0715 90 days prior to the
due date of your return. A letter will be sent to certify the credit.
To claim this credit, complete Section 1, Part 9 of Schedule CR.

Foreign Source Retirement Income Tax Credit

A credit is available to Virginia residents who paid income
tax to a foreign country on pension or retirement income
derived from past employment in a foreign country, provided
that such income is included in Virginia taxable income for
the taxable year. For purposes of computing the credit, the
foreign currency must be converted to U.S. dollars using the
prevailing exchange rate that most nearly reflects the value
of the currency at the time the taxes were actually paid to the
foreign country. If you filed separately in the foreign country,
but are filing jointly in Virginia, enter only the Virginia taxable
income attributable to the filer whose income was taxed by
the foreign country. For the purposes of this credit, United
States territories are considered foreign countries. Any foreign
country that does not qualify for the federal tax credit (under
IRC § 901(j)) does not qualify for this Virginia credit. To claim
this credit, complete Schedule CR and attach a copy of the
return filed in the foreign country or other proof of tax payment
to the foreign country.

Historic Rehabilitation Tax Credit

Individuals, estates, partnerships, trusts or corporations
incurring eligible expenses in the rehabilitation of a certified
historic structure are entitled to claim a credit against individual
income tax, fiduciary income tax, corporation income tax, the
bank franchise tax, and taxes imposed against insurance
companies and utility companies. The credit is equal to 25%
of eligible rehabilitation expenses for projects completed in
the 2000 taxable year and thereafter. To qualify for this credit,
the cost of the rehabilitation must equal at least 50% (25% if
the building is an owner-occupied residence) of the assessed
value of the building for local real estate tax purposes in the
year preceding the start of the rehabilitation. The rehabilitation
work must be certified by the Virginia Department of Historic
Resources as consistent with the Secretary of the Interior's
Standards for Rehabilitation. Any unused credit may be
carried forward for 10 years. Applications for certification
may be obtained by contacting the Virginia Department of
Historic Resources, 2801 Kensington Avenue, Richmond,
VA 23221, 804-367-2323, or visiting www.dhr.virginia.gov.

Day-Care Facility Investment Tax Credit

This credit expired December 31, 2013, and no credits may
be claimed for taxable years beginning after that date. Only
carryover credits from prior years are allowed. For additional
information, contact the Department of Taxation, Tax Credit
Unit, P. O. Box 715, Richmond, VA 23218-0715, or call 804-
786-2992.

Low-Income Housing Tax Credit

As of June 30, 2010, the Board of Housing and Community
Development stopped approving Low-Income Housing Credits.
Only carryover credits from prior years are allowed. For
additional information, contact the Department of Housing
and Community Development at 804-371-7000.

Qualified Equity and Subordinated Debt Investments Credit

Taxpayers making a "qualified investment" in the form of
equity or subordinated debt in a "qualified business" may be
eligible for this credit. Businesses may apply for designation
as a qualified business using Form QBA. The qualification is
valid only for the calendar year of the application. Therefore,
the business needs to reapply each year for qualification. To
qualify, the business must meet the following criteria: (1) have
annual gross revenues of no more than $3 million in its most
recent fiscal year, (2) have its principal office or facility in the
Commonwealth, (3) be engaged in business primarily in or
having substantially all of its production in the Commonwealth
and (4) have not obtained during its existence more than $3
million in aggregate gross cash proceeds from the issuance
of its equity or debt investments (not including commercial
loans from chartered banking or savings and loan institutions).

Taxpayers may claim a credit equal to 50% of the qualified
business investments made during the taxable year. For the
2014 taxable year, the total amount of credit approved may not
exceed $5 million. One-half of this amount must be allocated to
commercialization investments and the other half is available for
all other qualifying investments. If credit applications for either
half exceed the allowed amount, the credits for that half will
be prorated. However, if credit applications for either half are
less than the allowed amount, the balance will be available for
allocation to the other type of credit. The total amount of credit
that may be used per taxpayer per taxable year may not exceed
$50,000. This credit is nonrefundable; however, any unused tax
credits may be carried forward for the next 15 years. Equity and
debt investments held in connection with a qualified business
investment must be held by the investor for at least 3 full calendar
years following the calendar year for which the credit is allocated,
except in certain instances. If the holding period is not met, the
unused credit amount will be forfeited, and an assessment will
be issued for the amount used to which shall be added interest,
computed at the rate of one percent per month, compounded
monthly from the date the tax credits were claimed.

Taxpayers cannot receive a grant from the Small Business
Investment Grant Fund and claim the Qualified Equity and
Subordinated Debt Investments Tax Credit for the same
investment.

This credit requires pre-approval by the Department of
Taxation. Investors must apply to the Department by April 1
of the year following the year the investment was made using
Form EDC. Taxpayers filing Form EDC after April 1 will be
denied this credit. All approved investors filing a timely Form
EDC will be notified of the allowable credit by June 30. Since
the tax return of most individuals is due May 1, most investors
will need to file a return on extension or amend their original
return to claim the credit.

Pass-Through Entities must file Form PTE with the Department
of Taxation at least 60 days before filing their income tax
return. A copy of the certification letter from the Department
is a required attachment to Form PTE.

Visit the Department's website at www.tax.virginia.gov to
obtain Form QBA, Form EDC and Form PTE. Information
on the application process is also available from the Virginia
Department of Taxation, Tax Credit Unit, P. O. Box 715,
Richmond, VA 23218-0715, or call 804-786-2992.

Worker Retraining Tax Credit

This credit allows an employer to claim a tax credit for
the training costs of providing eligible worker retraining to
qualified employees. "Eligible worker retraining" includes
noncredit courses that are approved by the Department of
Business Assistance (DBA) and that are provided by any of
the Commonwealth's community colleges or a private school.
Eligible worker retraining programs also include courses (both
credit and noncredit) undertaken through an apprenticeship
agreement approved by the Virginia Apprenticeship Council.
The credit is 30% of all expenditures paid or incurred by the
employer during the taxable year, subject to certain limitations.
For taxable years beginning prior to January 1, 2013, if the
eligible worker retraining consists of courses conducted at a
private school, the credit cannot exceed $100 per qualified
employee annually. For taxable years beginning on or after
January 1, 2013, if the eligible worker retraining consists of
courses conducted at a private school, the credit cannot exceed
$200 per qualified employee annually, or $300 per qualified
employee annually if the eligible training includes retraining in
a STEM or STEAM discipline. A STEM or STEAM discipline is
defined as a science, technology, engineering, mathematics
or applied mathematics related discipline, as determined by
DBA, and includes a health care related discipline.

Employers must apply for certification of the amount of
allowable credit using Form WRC, Worker Retraining Tax
Credit, by April 1 of the year following the year in which the
training expenses were paid or incurred, before claiming the
credit on their income tax return. All approved businesses filing
a timely Form WRC will be notified of their allowable credit
by June 30. The maximum Worker Retraining Credits granted
to all employers is limited to $2,500,000 annually. If the total
credits approved exceed this amount, each will be prorated.
The credit is allowable against individual income tax, fiduciary
income tax, corporation income tax and the bank franchise
tax. The credit is also allowable against taxes imposed upon
insurance companies and utility companies (under Va. Code
§§ 58.1-2500 et seq. and 58.1-2620 et seq.). This credit is
nonrefundable, but excess credit may be carried forward for
the next 3 taxable years. To claim this credit, complete Section
1, Part 16 of Schedule CR. For information on pre-approved
apprenticeship programs, contact the Virginia Department
of Labor and Industry at 804-225-4362. For information on
noncredit course approval, contact: Virginia Department of
Small Business and Supplier Diversity, 1111 East Main
Street, Suite 300, Richmond, VA 23219 or call (804) 786-
6585.

Waste Motor Oil Burning Equipment Credit

A business that operates a business facility in Virginia that
accepts waste motor oil from the public is allowed a tax
credit equal to 50% of the purchase price paid for equipment
during the taxable year, provided that the equipment is used
exclusively for burning waste motor oil at the business facility.
The total credit allowed per taxpayer per taxable year is limited
to $5,000. Taxpayers successfully applying for equipment
certification with the Department of Environmental Quality
by filing Form DEQ 50-12 will receive a statement from that
agency certifying that the equipment is used for burning waste
motor oil. For additional information concerning equipment
qualifying for this credit or to apply for tax credit certification,
contact: Virginia Department of Environmental Quality,
Attention: Equipment Certification Officer, P. O. Box 1105,
Richmond, VA 23218, or call 804-698-4145.

Long-Term Care Insurance Tax Credit

This credit expired December 31, 2013, and no credits may
be claimed for taxable years beginning after that date. Only
carryover credits from prior years are allowed. For more
information, contact: Virginia Department of Taxation, Tax
Credit Unit, P.O. Box 715, Richmond, VA 23218-0715, or
call 804-786-2992.

Biodiesel and Green Diesel Fuels Tax Credit

Beginning on January 1, 2008, a credit is available for Virginia
biodiesel and green diesel fuel producers who produce up to
2 million gallons of fuel per year. This credit is only available
during the first 3 years of production.

Form BFC is used to apply to the Virginia Department of
Taxation for a Biodiesel and Green Diesel Fuels Tax Credit
after the Department of Mines, Minerals, and Energy has
certified that you have satisfied all the requirements of Va.
Code § 58.1-439.12:02.

The amount of the credit is $0.01 per gallon, not to exceed
$5,000 annually. Any credit not used for the taxable year may
be carried over to the next 3 taxable years. The amount of the
credit allowed cannot exceed the tax liability for the tax year
the credit is being claimed.

The amount of the credit attributable to a partnership, electing
small business corporation (S corporation), or limited liability
company must be allocated to the individual partners,
shareholders, or members in proportion to their ownership or
interest within the business entity using Form PTE.

The credit may be transferred to another taxpayer. The
transfer of the credit must be completed before the end of a
tax year in order to use the credit for that tax year. For more
information, contact: Virginia Department of Taxation, Tax
Credit Unit, P.O. Box 715, Richmond, VA 23218-0715, or
call 804-786-2992.

Livable Home Tax Credit

Individuals or licensed contractors may be eligible for an income
tax credit of up to $5,000 for the purchase or construction of a
new accessible residence or up to 50% of the cost of retrofitting
activities on an existing residence, not to exceed $5,000. Any
tax credit that exceeds the eligible individual's or licensed
contractor's tax liability may be carried forward for up to 7 years.
If the total amount of tax credits issued under this program
exceeds $1 million in a fiscal year, Virginia Department of
Housing and Community Development (DHCD) will prorate the
amount of credits among the eligible applicants. Individuals or
licensed contractors must obtain pre-approval before claiming
the credit on their income tax returns. Applications are to be
filed with the DHCD by February 28 of the year following
the year in which the purchase/construction or retrofitting
was completed. Documentation must be submitted with the
application. Enter any carryforward amount of the Livable
Home Tax Credit in Section 1, Part 20, Line B of Schedule
CR. For more information, contact: Virginia Department of
Housing and Community Development, Special Needs
Housing, Main Street Centre, 600 East Main Street, Suite
300, Richmond, VA 23219, or call 804-371-7124.

Riparian Forest Buffer Protection for Waterways Tax
Credit

Individuals, trusts and corporations may qualify for an income
tax credit of 25% of the value of the timber on land designated
as a riparian buffer for a waterway. The credit may not exceed
$17,500 or the total amount of tax, whichever is less. To apply
for this credit, file Department of Forestry (DOF) Form 179 with
DOF or apply online at www.dof.virginia.gov.

A riparian buffer is a wooded area of land adjacent to a
waterway on which timber may be harvested. In order to
receive the credit, the owner of such land must refrain from
harvesting more than 50% of the timber from tracts designated
as riparian buffers. The buffer must be at least 35 feet wide
and no more than 300 feet. There must also be a Forest
Stewardship Plan and annual certification of compliance for
each tract. The buffer must remain in place for at least 15 years.
The land that is the subject of this credit cannot be the subject
of this credit again for 15 years after it was first taken. The credit
may be carried over for the succeeding 5 taxable years. For
more information, contact: Virginia Department of Forestry,
900 Natural Resources Dr., Suite 800, Charlottesville, VA
22903, or call 434-977-6555.

Land Preservation Tax Credit

This tax credit is for taxpayers that convey land or interest in
land located in Virginia to a public or private agency eligible
to hold such land or interests for conservation or preservation
purposes. The conveyance must be in perpetuity.

Credits for conveyances made in 2007 and thereafter are equal
to 40 percent of the land's fair market value. All fair market
valuations must be substantiated by a "qualified appraisal"
and prepared by a "qualified appraiser," as those terms are
defined under applicable federal law and regulations governing
charitable contributions. Generally, the credit limit per taxpayer
per taxable year is $100,000. However, for taxable years 2009,
2010, and 2011, the total amount of credit per taxpayer per
taxable year was limited to $50,000 or the total tax liability,
whichever was less. For the 2012 taxable year and thereafter,
the credit limit per taxpayer per taxable year is $100,000.
For taxpayers affected by the 2009 and 2010 usage limit, an
additional 2-year carryforward will be added to the credit. For
taxpayers affected by the 2011 usage limit, an additional 3
years carryforward will be added to the credit. Any unused
credit not affected by the usage limits will retain the original
carryforward periods (5 years for donations originating prior
to January 1, 2007 and 10 years for donations originating on
or after January 1, 2007).

Any taxpayer holding a Land Preservation Tax Credit that
originated on or after January 1, 2002, may transfer unused
but otherwise allowable credit for use by another taxpayer
on Virginia income tax returns. Transfers and pass-through
allocations derived from donations recorded on or after January
1, 2007, are subject to a fee. See Schedule A of Form LPC-1
or Form LPC-2 for further information.

If this credit is taken, then for the next 3 years taxpayers cannot
take a subtraction for the gain on the sale of land or easements
dedicated to open-space use. A subtraction is allowed for any
gain or income recognized by a taxpayer on the application of
a Land Preservation Tax Credit against a Virginia income tax
liability, to the extent the gain is included in and not otherwise
subtracted from federal adjusted gross income. The transfer
of the credit and its application against a tax liability shall not
create gain or loss for the transferor or the transferee.

Before claiming the credit, complete and file Form LPC-1
and/or Form LPC-2 with the Department of Taxation at least
90 days before filing your income tax return. Additionally,
applicants filing for tax credits of $1 million or more must
apply to the Department of Conservation and Recreation to
receive verification of the conservation value. The Department
of Taxation will issue a letter acknowledging the amount of
the credit. For assistance, contact the Virginia Department
of Taxation, Tax Credit Unit, P. O. Box 715, Richmond, VA
23218-0715, or call 804-786-2992.

Community of Opportunity Tax Credit

The Community of Opportunity Tax Credit provides Virginia
income tax credits to landlords with qualified housing units
located in census tracts with poverty rates of less than ten
percent in the Richmond Metropolitan Statistical Area who
participate in the Housing Choice Voucher program.

The amount of tax credit for an eligible property is equal to
10% of the annual fair market rent for that specific unit and
prorated when units are qualified for less than the full tax
year. Prorations are based on full calendar months. A landlord
may receive tax credits on one or more units within the same
taxable year. Credits taken for any 1 tax year cannot exceed
the tax liability for that year. Credits not taken for the year for
which they are allocated may be carried forward, but cannot
be carried forward for more than 5 years.

Should eligible applications received by the March 1 deadline
exceed the annual appropriation, tax credits will be prorated
based on the total amount of qualified requests received and
the total amount of credits available. If the annual appropriation
for tax credits is not fully allocated based on qualified
applications received by the March 1 deadline, the remaining
balance will be allocated on a first-come, first-served basis.
Unused balances will not be allocated more than 3 years after
the taxable year in which they were first made available.

Credits granted to a partnership, limited liability company, or
electing small business corporation (S corporation) shall be
allocated to the individual partners, members, or shareholders
in proportion to their ownership or interest in such business
entity. The landlord must assume responsibility for distributing
credits in this manner. No person shall be allowed a tax credit
under Va. Code § 58.1-339.9 (Rent Reductions Tax Credit)
and the Community of Opportunity Tax Credit tax credit for the
rental of the same dwelling unit in a taxable year.

For taxable years beginning on and after January 1, 2010, but
before January 1, 2015, a $500 income tax credit is allowed for
the creation of green jobs paying an annual salary in excess of
$50,000. Each taxpayer is allowed a credit for up to 350 new
green jobs. In order to qualify for the tax credits, the taxpayer
must have created the green job and filled it during the taxable
year in which the credit is claimed. The credit is allowed for the
taxable year in which the job has been filled for at least 1 year
and for each of the 4 succeeding taxable years, provided that
the job is continuously filled during the respective taxable year.
Any unused tax credits may be carried over for 5 taxable years.

To apply for this credit, complete and file Form GJC with
the Department of Taxation, Tax Credit Unit, P. O. Box
715, Richmond, VA 23218-0715. All applications must be
submitted at least 90 days prior to the due date of your
return. Approved applicants will receive a letter from the
Department certifying their credit. To claim the credit you
must complete Section 1, Part 24 of Schedule CR.

Establishes a tax credit for individuals who make contributions
to candidates for state or local political office equal to 50%
of the amount of the contribution, subject to a $25 limit for
individuals and a $50 limit for married taxpayers filing jointly.

Farm Wineries and Vineyards Tax Credit

An individual and corporate income tax credit is available for
Virginia farm wineries and vineyards in an amount equal to 25%
of the cost of all qualified capital expenditures made in connection
with the establishment of new Virginia farm wineries and vineyards
and capital improvements made to existing Virginia farm wineries
and vineyards.

The total amount of tax credits available for a calendar year cannot
exceed $250,000. If applications for this credit exceed $250,000,
the Department of Taxation will allocate the credits on a pro rata
basis. Any credit amounts that exceed a taxpayer's liability can
be carried forward for 10 years. Taxpayers cannot claim both
this credit and a federal deduction for the same expenses under
IRC § 179.

The business must apply by April 1st using Form FWV. Submitting
a late application will disqualify you from the credit. All applications
must be sent to the Virginia Department of Taxation, Tax Credit
Unit, P.O. Box 715, Richmond, VA 23218-0715. This credit
requires certification from the Tax Credit Unit to be claimed on
your tax return. A letter will be sent to certify the credit.

An income tax credit is allowed for either increasing jobs related
to an international trade facility or capital investment in an
international trade facility. Taxpayers can elect to claim either
credit, but cannot claim both credits in the same taxable year. The
amount of the credit is equal to $3,500 per new qualified full-time
employee that results from increased qualified trade activities by
the taxpayer or two percent of the amount of capital investment
made by the taxpayer to facilitate the increased eligible trade
activities.

No more than $1.25 million in tax credits can be issued in any
fiscal year. If the amount of tax credits requested exceeds $1.25
million, the credits will be allocated proportionately among all
qualified taxpayers. The Virginia Department of Taxation will
determine the credit amount for the taxable year and provide a
written certification to each taxpayer. The amount of the credit
will be limited to fifty percent of the taxpayer's tax liability for the
taxable year. Any unused credit amount can be carried forward
for 10 years.

The business must apply by April 1st using Form ITF. Submitting
a late application will disqualify you from the credit. All applications
must be sent to the Virginia Department of Taxation, Tax Credit
Unit, P.O. Box 715, Richmond, VA 23218-0715. This credit
requires certification from the Tax Credit Unit to be claimed on your
tax return. A letter will be sent to certify the credit. For assistance
contact the Department of Taxation, Tax Credit Unit, P. O.
Box 715, Richmond, VA 23218-0715 or call 804-786-2992.

Port Volume Increase Tax Credit

A taxpayer that is an agricultural entity, a manufacturing-related
entity (manufacturer or distributor of manufactured goods) or a
mineral and gas entity that uses Virginia maritime port facilities
and increases its port cargo volume through these facilities may
be eligible to claim this tax credit.

To qualify for the credit, a taxpayer must generally increase its
port cargo volume at Virginia port facilities in a single calendar
year by 5% over its base year port cargo volume. Base year
port cargo volume is equal to the total amount of net tons of
noncontainerized cargo or 20-foot equivalent units (TEUs) or units
of roll-on of cargo actually transported by way of a waterborne ship
or vehicle through a port facility during the 2013 calendar year or
the first calendar year in which it meets the requirements of 75
tons of noncontainerized cargo, 10 loaded TEUs or 10 units of
roll-on/roll-off cargo. The amount of the credit is generally equal
to $50 for each TEU, unit of roll-on/roll-off cargo, or 16 net tons of
noncontainerized cargo above the base year port cargo volume.
However, a qualifying major facility may apply for a credit equal
to $50 for each TEU unit of roll-on/roll-off cargo, or 16 net tons of
noncontainerized cargo transported through a port facility during
the major facility's first calendar year.

Any taxpayer claiming this credit must first submit an application
to the Virginia Port Authority by March 1 of the calendar year
after the taxable year in which the increase in port cargo volume
occurs. The maximum amount of tax credits is capped at $3.2
million for each calendar year. If, on March 15 of each year,
the cumulative amount of tax credits requested by qualifying
taxpayers for the prior year exceeds $3.2 million, the credits will
be prorated among the qualifying taxpayers who requested the
credit. A qualifying taxpayer is generally not permitted to receive
more than $250,000 each calendar year. However, if, on March
15 of each year, the $3.2 million credit amount is not fully allocated
among qualifying taxpayers, those taxpayers who have already
been allocated a credit for the prior year are allowed a pro rata
share of the remaining credit amount. Any unused tax credits
may be carried over for 5 taxable years.

For taxable years beginning on and after January 1, 2011, but
before January 1, 2017, a business may receive an income tax
credit for the usage of barge and rail to move cargo containers
throughout the Commonwealth rather than using trucks or other
motor vehicles on the Commonwealth's highways.

The amount of the credit is $25 per 20-foot equivalent unit (TEU)
or 16 tons of noncontainerized cargo or one unit of roll-on/
roll-off cargo moved by barge or rail. To receive this credit, an
international trade facility is required to apply to the Department.
No more than $500,000 in tax credits can be issued in any fiscal
year. The Department will determine the allowable credit amount
for the taxable year and provide a written certification of the credit
amount to each taxpayer. Taxpayers can claim this credit against
the individual income tax, the corporate income tax, the tax on
estates and trusts, the bank franchise tax, the insurance premiums
tax, and the tax on public service corporations. Any unused tax
credits may be carried over for five taxable years.

The business must apply by April 1st using Form BRU. Submitting
a late application will disqualify you from the credit. All applications
must be sent to the Virginia Department of Taxation, Tax Credit
Unit, PO Box 715, Richmond, VA 23218-0715. This credit
requires certification from the Tax Credit Unit to be claimed on
your tax return. A letter will be sent to certify the credit.

Telework Expenses Tax Credit

The Telework Expenses Tax Credit is an individual and
corporate income tax credit for employers who (1) incur
eligible telework expenses pursuant to a telework agreement
or (2) conduct telework assessments. This credit is equal to
the amount of expenses incurred during the January 1, 2012
to January 1, 2017 calendar years and must be for eligible
telework expenses incurred during the calendar year that
ends during the taxable year. The amount of the credit cannot
exceed $50,000 per year for each employer.

To qualify for a credit for eligible telework expenses incurred
pursuant to a telework agreement, the employer must enter into
a signed telework agreement with the teleworking employee
on or after July 1, 2012, but before January 1, 2017. This
telework agreement must be in accordance with policies set
by the Department of Rail and Public Transportation (DRPT).
Such policies are available on the Telework!VA website at www.
teleworkva.org. The maximum amount of expenses that can
be used in determining the amount of this portion of the credit
is $1,200 per employee.

The portion of the credit for telework assessment expenses is
equal to the costs of preparing an assessment, not to exceed
$20,000. This portion of the credit can only be claimed once
by an employer.

Taxpayers may claim this credit for taxable years beginning
on or after January 1, 2012, but before January 1, 2017. The
aggregate amount of tax credits that will be issued is capped at
$1 million annually. If credit applications exceed the $1 million
cap, credits will be allocated on a pro rata basis.

The amount of credit claimed cannot exceed the tax liability of
the taxpayer. There is no carryforward of any unused credit.
Accordingly, even if a taxpayer is granted a credit amount, he
must have sufficient tax liability in order to claim the full credit
amount. If the amount of credit granted exceeds the taxpayer's
tax liability, he may only claim the credit up to the amount of
his tax liability for the taxable year. To be eligible for this credit,
the employer is not allowed to deduct the qualified expenses
in any taxable year. If these expenses are deducted for federal
purposes, they will need to be included as an addition on the
Virginia return. Taxpayers are not eligible for this tax credit if
any other income tax credit is claimed for the same expenses.

To qualify for the credit, the employer cannot claim another
Virginia income tax credit on the jobs, wages or other expenses
for the same employee.

Taxpayers are required to apply to the Department of Taxation
to reserve a portion of the credit. The reservation application
must be filed between September 1 and October 31 of the year
preceding the taxable year for which the tax credit is earned.
The Department of Taxation will provide tentative approval
by December 31. If the applications for the credit exceed the
cap, the credits will be allocated to taxpayers on a pro rata
basis. To be eligible to claim the credit, a Telework Expenses
Tax Credit Confirmation Application must be filed by April 1 of
the year following the calendar year that the eligible expenses
were incurred.

Information on the application process is available from the
Virginia Department of Taxation, Tax Credit Unit, P. O. Box
715, Richmond, VA 23218-0715, or call 804-786-2992.

Education Improvement Scholarships Tax Credit

For taxable years beginning on or after January 1, 2014, but
before January 1, 2028, an income tax credit may be claimed
for monetary or marketable securities donations made to
scholarship foundations included on an approved list published
by the Virginia Department of Education. Credits may be
earned in taxable years beginning on or after January 1,
2013, but before January 1, 2028. Tax credits earned during
Taxable Year 2013 must be claimed in Taxable Year 2014. Tax
credits earned during the Taxable Year 2014 and thereafter
must be claimed in the year during which they were earned.
Accordingly, Education Improvement Scholarships Tax Credits
earned during both Taxable Years 2013 and 2014 should
be claimed on the 2014 tax return. The credit is equal to 65
percent of the monetary or marketable securities donation
made to the scholarship foundation. The credit can be claimed
against the individual income tax, corporate income tax, bank
franchise tax, insurance premiums license tax, or tax on public
service corporations. For individuals, the minimum value of
any monetary or marketable securities donation eligible for a
tax credit is $500 in a taxable year, and the maximum value
of monetary or marketable securities donations eligible for tax
credits is the first $125,000 in value of donations made in a
taxable year. Such limitations on the minimum and maximum
values of donations eligible for tax credits in a taxable year do
not apply to donations made by any business entity, including
a sole proprietorship.

Tax credits will be awarded to taxpayers on a first-come, first-
served basis in accordance with procedures established by
the Virginia Department of Education. The total amount of
credits available in any fiscal year is capped at $25 million.
Any unused tax credits may be carried over for the next five
succeeding taxable years or until the total amount of credit has
been taken, whichever is sooner. For additional information
on how to qualify for certification, contact the Department of
Education at 804-225-3375.

Coalfield Employment Enhancement Tax Credit

For taxable years beginning on or after January 1, 1996,
but before January 1, 2017, a tax credit may be earned by
individuals, estates, trusts and corporations who have an
economic ownership interest in coal mined in Virginia. Credits
may be claimed for taxable years beginning on or after January
1, 1999. Compute the allowable credit on Form 306 and report
it on Schedule CR for the taxable year in which the credit is
claimed and/or earned.

Virginia Coal Employment and Production Incentive Tax
Credit

This credit may be allocated between a qualifying electricity
generator and qualifying person with an economic interest in
coal. The allocation of this credit may not exceed $3 per ton. All
credits earned on but after January 1, 2006, or prior to July 1,
2016, which are allocated to persons with an economic interest
in coal, may be redeemed by the Tax Commissioner if the credits
exceed the taxpayer's state tax liability for the applicable taxable
year. To claim this credit, you must complete the Form 306, Form
306T and any applicable attachments.

Motion Picture Production Tax Credit

Qualifying motion picture production companies are eligible to
receive a series of refundable individual and corporate income tax
credits in the aggregate amount of $2.5 million for the 2010-2012
biennium and $5 million for the 2012-2014 biennium. Effective
July 1, 2014, (fiscal year 2015), and each fiscal year thereafter,
the cap amount increases to $6.5 million. Base-Income Tax
Credit: The base credit available is 15% of all qualifying expenses
(including wages), with a bonus of 5% if the production is filmed in
an economically distressed area of the Commonwealth, making
the total base credit available up to 20% of qualifying expenses.

Additional Virginia Resident Credit: The production company is
allowed an additional credit of 10 to 20% of the total aggregate
payroll for Virginia residents employed in connection with the
motion picture production. For companies that spend at least
$250,000 in total production costs in the Commonwealth, but not
more than $1 million, the credit will equal 10% of the total Virginia
resident aggregate payroll. For companies that spend over $1
million in total production costs in the Commonwealth, the credit
will equal 20% of the total aggregate Virginia resident payroll.

Additional Virginia Resident First-Time Industry Employee Credit: In addition to the above outlined credits, companies may claim a
credit of 10% of their total aggregate payroll for Virginia residents
who are employed as first time actors or first time members of a
production crew in connection with a production in Virginia.

To qualify for this credit, production companies must submit an
initial application to the Virginia Film Office ("VFO") at least 30
days prior to production and must enter into a Memorandum
of Understanding. After production is complete, the production
company must submit documentation to the VFO and will be
issued a certification letter. A taxpayer may only claim this credit
after receiving the certification letter from the VFO. For more
information, contact: Virginia Film Office, 901 East Byrd Street,
Richmond, VA 23219-4048, or call 800-854-6233.

Credits available through the Virginia Motion Picture Production
Tax Credit are offered in addition to other Virginia production
incentives. For additional information regarding all available
funding assistance for Virginia productions, please refer to the
Virginia Film Office's website (http://FilmVirginia.org).

Agricultural Best Management Practices (BMP) Tax
Credit

This credit is available to qualified taxpayers engaged in
agricultural production for market or having equines that
create needs for agricultural best management practices
to reduce nonpoint source pollutants who have in place a
soil conservation plan approved by the local Soil and Water
Conservation District (SWCD). The credit is 25% of the first
$70,000 expended for agricultural best management practices
approved by the local SWCD. The maximum credit is $17,500 or
the total amount of state income tax obligation of the individual.
Effective for taxable years beginning on and after January 1,
2011, this credit is refundable to individual taxpayers. The
credit is still non-refundable to corporate taxpayers. Individual
taxpayers who had a carryforward amount from credits claimed
in the 2006, 2007, 2008, 2009, or 2010 taxable years are
permitted to claim that carryforward amount on their 2011
income tax returns and will receive a refund for any excess
amount of the carryforward. Individual taxpayers who had a
carryforward amount from credits claimed prior to 2006 are
not permitted to claim that carryforward amount on their 2011
return. If a pass-through entity (PTE) distributes this credit to
an individual partner, shareholder, or member, the amount of
the Agricultural Best Management Practices Tax Credit listed
on the individual's Schedule VK-1 is refundable and should be
claimed in Section 3, Part 3 of the Schedule CR. Any amount
distributed by a PTE to a corporate partner, shareholder, or
member is non-refundable. For additional information about
eligible BMPs, contact your local Soil and Water Conservation
District Office.

For additional tax return related information visit our website
at www.tax.virginia.gov, or call the Virginia Department of
Taxation at 804-786-2992.

Research and Development Expenses Tax Credit

A refundable individual and corporate income tax credit is allowed
for qualified research and development expenses for taxable years
beginning on or after January 1, 2011, but before January 1, 2019.
The tax credit is equal to (i) 15% of the first $234,000 in Virginia
qualified research and development expenses, or (ii) 20% of the
first $234,000 of Virginia qualified research and development
expenses if the research was conducted in conjunction with a
Virginia public or private college or university, to the extent the
expenses exceed a base amount. There is a cap on the total
amount of credits allowed in any fiscal year. If the total amount
of approved tax credits is less than the credit cap amount, the
Department of Taxation will allocate the remaining amount
to the taxpayers already approved for the tax credits for the
taxable year for 15% of the second $234,000 in Virginia qualified
research expenses or 20% of the second $234,000 in Virginia
qualified research expenses if the research was conducted in
conjunction with a Virginia public college or university to the
extent the expenses exceed the Virginia base amount, on a
pro rata basis.

Effective for fiscal years beginning on or after July 1, 2014, the
maximum annual amount of tax credits that may be issued each
fiscal year increases from $5 million to $6 million.

The business must apply by April 1st using Form RDC. Submitting
a late application will disqualify you for the credit. All applications
must be sent to the Virginia Department of Taxation, Tax
Credit Unit, P.O. Box 715, Richmond, VA 23218-0715. This
credit requires certification from the Tax Credit Unit in order to be
claimed on your tax return. A letter will be sent to certify the credit.

The amount of the credit attributable to a partnership, electing small
business corporation (S corporation), or limited liability company
(LLC) must be allocated to the individual partners, shareholders, or
members in proportion to their ownership or interest in the business
entity using Form PTE within 30 days after the credit is granted.

Any taxpayer that is allowed a Research and Development
Expenses Tax Credit is not allowed to use the same expenses as
the basis for claiming any other Virginia tax credit. If the taxpayer
conducts research and development in Virginia on human cells or
tissue derived from induced abortions or from stem cells obtained
from human embryos, then the credit for the approved research
and development expenses will not be allowed to be refunded to
the taxpayer.

If you did not conduct embryonic stem cell research in Virginia, then
the tax credit is refundable. Enter the amount of the credit that is
allowed on Line 4A under Section 3, Part 4 of the Schedule CR.

If you did conduct embryonic stem cell research in Virginia, then
the tax credit is nonrefundable. Enter the amount of the credit that
is allowed in Section 1, Part 30 of the Schedule CR.